Compression and decompression algorithms are widely used for processing digital bitstreams, especially where the bitstreams represent digitized audio, video, graphics, etc. One such algorithm is the a lossless compression format (LCF) used in a number of products from SILICON GRAPHICS. The LCF format is related to a format presented in a NASA JPL paper entitled “Algorithms for a Very High Speed Universal Noiseless Coding Module” by Robert F. Rice, Pen-Shu Yeh and Warner Miller (the Rice algorithm). LCF is a lossless compression format that is relatively simple to implement in hardware, thus there is a desire to use LCF in products that process large amounts of real-time data, including high performance applications like HDTV image compression. However, a problem arises in that the performance needed to encode/decode, for example, HDTV resolution images at video rates is not generally possible using the conventional LCF architecture and application specific integrated circuit (ASIC) technology. To overcome problems with performance, some compression schemes try to process separate bitstreams using parallel processing paths. However, this typically is not helpful in improving performance within a single bitstream.